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CHAPTER 1
INTRODUCTOIN
2
1.1
Everyone is exposed to various risks. Future is very uncertain, but there is way
to protect
ones family and make ones childrens future safe. Life Insurance companies help us
to
ensure that our familys future is not just secure but also prosperous.
Life Insurance is particularly important if you are the sole breadwinn
er for your family.
The loss of you and your income could devastate your family. Life insurance will
ensure
that if anything happens to you, your loved ones will be able to manage financia
lly.
This study titled Study of Consumers Perception about Life Insurance Policies enab
les
the Life Insurance Companies to understand how consumers perception diff
ers from
person to person.
How a consumer selects, organizes and interprets t
he service quality
and the product quality of different Life Insurance Policies, offered
by various Life
Insurance Companies.
Insurance is a tool by which fatalities of a small number are compens
ated out of
funds (premium payment) collected from plenteous. Insurance companies pa
y back for
financial losses arising out of occurrence of insured events e.g. in
personal accident
policy death due to accident, in fire policy the insured events are
fire and other allied
perils like riot and strike, explosion etc. hence insurance safeguard against un
certainties.
TYPES OF INSURANCE
Insurance occupies an important place in the modern world because of
the risk, which
can be insured, in number and extent owing to the growing complexity
of present day
economic system. The different type of insurance have come about by p
ractice within
insurance companies, and by the influence of legislation controlling th
e transacting of
insurance business, broadly, insurance may be classified into the following cate
gories:
1. Classification from business point of view
a) Life insurance, and
b) General insurance
2. Classification on the basis of nature of insurance
a) Life insurance
b) Fire insurance
c) Marine insurance
d) Social insurance, and
e) Miscellaneous insurance
3. Classification from risk point of view
a) Personal insurance
b) Property insurance
c) Liability insurance
d) Fidelity general insurance
5
THE IMPORTANCE OF INSURANCE
Insurance benefits society by allowing individuals to share the risks fa
ced by many
people. But it also serves many other important economic and societal functions.
Because
insurance is available and affordable, banks can make loans with the
assurance that the
loans collateral (property that can be taken as payment if a loan goes unpaid) is
covered
against damage. This increased availability of credit helps people buy
homes and cars.
Insurance also provides the capital that communities need to quickly rebuild and
recover
economically from natural disasters, such as tornadoes or hurricanes.
Insurance itself has become a significant economic force in m
ost industrialized
countries. Employers buy insurance to cover their employees against wor
k-related
injuries and health problems. Businesses also insure their property, including t
echnology
used in production, against damage and theft. Because it makes business operatio
ns safer,
insurance encourages businesses to make economic transactions, which ben
efits the
economies of countries. In addition, millions of people work for insurance compa
nies and
related businesses. In 1996 more than 2.4 million people worked in the insurance
industry
in the United States and Canada.
Insurance as an investment that of
6
THE INSURANCE INDUSTRY TODAY
Since the 1970s, the insurance business has grown dramatically and
undergone
tremendous changes. As a result of the deregulation of financial servi
ces businesses
including insurance, banking, and securities tradingthe roles, products, and serv
ices of
these formerly distinct businesses have become blurred. For instance, citizens i
n the U.S.
state of California voted in 1988 to allow banks to sell insurance in that state
. In Canada,
banks may also soon be allowed to sell insurance.
Advances in communications technology have also allowed traditionally
distinct financial businesses to keep instantaneous track of development
s in other
businesses and compete for some of the same customers. Some insurance companies
now
offer deposit accounts and mortgages. In the United States, life insurance compa
nies now
sell more pension plans and other asset management services than they
do conventional
life insurance.
Developments in computer technology that have given insurance providers
the ability to quickly access and process information have allowed them to custo
m-design
policies to fit the needs of individual customers. But the increasing complexity
of policies
has also made some aspects of buying and selling insurance more difficult.
In addition, improvements in geological and meteorological technology have th
e
potential to change the way property insurers calculate risks of damage. For exa
mple, as
scientists improve their abilities to predict severe weather patterns,
such as hurricanes,
and geological disturbances, such as earthquakes, insurers may change how they p
rovide
protection against losses from such events
7
EVOLUTION OF INSURANCE IN INDIA
The marine insurance is the oldest form of insurance. If we trace
Indian history
there are evidence that marine insurance was practiced here about thre
e thousand years
ago. The code of Manu indicates that there was the practice of marine insurance
carried
out by the traders in India with those of Srilanka, Egypt and Greece .it is wond
erful to see
that Indians had even anticipated the doctrine of average and contribu
tion. Fright was
fixed according to season and was then very much at the mercy of th
e wind and other
elements. Travelers by sea and land were very much exposed to the ri
sk of losing their
vessels and merchandise because of piracy on open seas and highway ro
bbery of
caravans was very common. The practice of insurance was very common during the r
ule
of Akbar to Aurangzeb, but the nature and coverage of the insurance in this peri
od is not
well known. It was the British insurer who introduced general insuranc
e in India in the
modern form. The Britishers opened general insurance in India around the year 17
00 .the
first company known as the sun insurance office was set up in Calcutta in the ye
ar 1710.
This was followed by several insurance companies like London assurance
and royal
exchange assurance (1720), Phoenix Assurance Company (1782). Etc. General insura
nce
business in the country was nationalized with effect from 1st January
1973 by the
General Insurance Business (Nationalization) Act, 1972. More than 100 n
on-life
insurance companies including branches of foreign companies operating wi
thin the
country were amalgamated and grouped into four companies, viz., the National Ins
urance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Compa
ny
Ltd., and the United India Insurance Company Ltd. with head offices a
t Calcutta,
Bombay, New Delhi and Madras, respectively.
8
Life insurance in the current form came in Indi
a from united kingdom
with the establishment of a British firm, oriental life assurance company in 181
8 followed
by Bombay life assurance company in 1823, the madras equitable life insurance
society
in 1829 and oriental life assurance company in 1874.prior to 1871, In
dian lives were
treated as sub standard and charged an extra premium of 15% to 20%.
Bombay mutual
life assurance society, an Indian insurer that came in to existence in 1871, was
the first to
cover Indian lives at normal rates. The Indian insurance company Act 1923 was en
acted
inter alia, to enable the government to collect statistical information about li
fe and nonlife insurance business transacted in India by Indian and foreign insu
rer, including the
provident insurance societies.
The first half of the 20
th
century marked by two world war, the adverse affects
of the World War I and World War II on the economy of India, and in between them
the
period of world wide economic crises triggered by the Great depression. The firs
t half of
the 20th century was also marked by struggles for Indias independence.
The aggregate
effect of these events led to a high rate of bankruptcies and liquidation of
life insurance
companies in India. This had adversely affected the faith of the gene
ral public in the
utility of obtaining life cover
In this background, the Parliament of India passed the Life Insurance of
India Act on
19th June 1956, and the Life Insurance Corporation of India was creat
ed on 1st
September, 1956, by consolidating the life insurance business of 245 private lif
e insurers
and other entities offering life insurance services.
9
Since 1972, the insurance sector has been to
tally under the control of
government of India through LIC and GIC and its subsidiaries. As a r
esult, revenue of
both of them increased in the last years .the amount of savings pooled by LIC in
creased
from Rs.2704 crores in 1974 to Rs .57670 in 1994 with an annual growth rate of 1
6.53%
.similarly premium underwritten by GIC rose from 280 crores in 193 to
7647 crores in
1998 showing an annual growth rate of 25.18%.
Despite increase in premium collected by both LIC and GIC their were i
nefficiency
and red tapeisum creeped in to the insurance sector. Apart from that a major pol
icy shift
by the Narasimha Rau government during 1990s.the Indian economy opened for forei
gn
competition .In this background
The government of India in 1993 had
set-up a high
powered committee by R.N Malhothra ,former governor reserve bank of In
dia, to
examine the structure of Indian insurance sector and recommended change
s to make it
more efficient and competitive keeping in view structural changes in o
ther part of the
financial system of the country.
Insurance sector has been opened up for competition from Indian privat
e insurance
companies with the enactment of Insurance Regulatory and Development Authority A
ct,
1999 (IRDA Act). As per the provisions of IRDA Act, 1999, Insurance
Regulatory and
Development Authority (IRDA) was established on 19th April 2000 to pro
tect the
interests of holder of insurance policy and to regulate, promote and ensure orde
rly growth
of the insurance industry. IRDA Act 1999 paved the way for the entry of private
players
into the insurance market, which was hitherto the exclusive privilege
of public sector
insurance companies/ corporations.
10
EVOLUTION OF INSURANCE ORGANIZATION
With a view to serve the society, the insurance organizations have b
een developed
in different forms with innovation of insurance practice for social we
lfare and
development; some of these forms are outlined here.
a) Self-insurance
The arrangement in which an individual or concern sets up a private
fund to meet
the future risk. If some losses happened in the future the firm meet
s the loss out of the
fund. While it may be called self insurance it is not a single matter of fact, ins
urance at
all because there is no hedge, no shifting, or distributing the burden of risk a
mong larger
Persons. It is merely a provision to meeting the unforeseen event. He
re the insured
become the insurer for the particular risk. But it can be effectively
worked only when
there is wide distribution of risks subjected the same hazard.
b) Partnership
A partnership firm may also carry on the insurance business for the sake of prof
it. Since it
is not an entity distinct from the persons comprising it, the personal liability
of partners in
respect to the partnership debts is unlimited. In case of huge loss the partners
may have to
pay from their own personal funds and it will not be profitable to them to start
s insurance
business .in the early period before the advent of joint stock companie
s many insurance
undertakings were partnership firms or unincorporated companies
c) Joint stock companies
The joint stock companies are those, which are organized by the share
holders who
subscribe the necessary capital to start the business. These are formed for earn
ing profits
for the stockholders who are the real owners of the companies. The m
anagement of a
company is entrusted to a board of directors who is elected by the
shareholders from
amongst themselves. The company can operate insurance business and poli
cyholders
have nothing to do with the management of the concern. But in life
insurance it is the
practice to share certain portion of profit among the certain policyholders.
11
d) Mutual fund companies
The mutual fund companies are co- operative association
formed for the
purpose of effecting insurance on the property of its members. The po
licyholders are
themselves the shareholders of the companies each member is insured as well as i
nsured.
They have power to participate in management and in the profit sharing to the fu
ll extent.
Whenever the income is more than the expenses and claims, it is accumulated I th
e form
of saving and is entitled in reducing the rate of premium. Since the
insured are insurers
also, they always try to reduce the management expenses and to keep
the business at
sound level.
e) Co-operative insurance organizations
Cooperative insurance organizations are those conce
rns, which are
incorporated and registered under Indian cooperative societies Act. The concerns
are also
called co operative insurance societies these societies like mutual fund
companies are
non profit organization .the aim is to provide insurance protection to i
ts members at the
lowest reasonable net cost .the Indian
insurance Act. 1938, has pr
ovided special
provisions for the co-operative insurance societies, but after nationalization t
he societies
have ceased to exist.
f) Lloyds Association
Lloyds association is one of the greatest insurance institutio
ns in the world.
Taking its name from the coffee house Lloyd where underwriters assembl
ed to transact
business and pick-up news. The organization traces its origins to the
latter part of the
seventeenth century .so it is the oldest insurance organization in exi
sting form in the
world. In 1871,Lloyds Act was passed incorporating the members of the associatio
n into
a single corporate body with perpetual succession and a corporate seal
.the powers of
Lloyds corporation were extended from the business of marine insurance
to the other
insurance and guarantee business. The Lloyds Association also publishes, Lloyds
list and
register of shipping for the information of insuring public and the insurers
12
g) State Insurance
The government of a nation, some times, owns the
and runs the
business for the benefit of the public. The sate insurance
as that insurance
which is under public sector. In Brazil, Japan and Mexico,
nce are largely
nationalized. Previously, the state undertook only those insurances,
regarded
as vital for the national interest.
insurance
is defined
the insura
which were
I IN NS SU UR RA AN NC CE E S SE EC CT TO OR R R RE EF FO OR RM MS S
Having looked at the insurance sector, the efforts made by the govern
ment to
make the industry more dynamic and customer friendly. To begin with,
the Malhotra
committee was set up with the objective of suggesting changes that wo
uld achieve the
much required dynamism.
T Th he e M Ma al lh ho ot tr ra a C Co om mm mi it tt te ee e R Re ep po or rt
t
In 1993, Malhotra Committee, headed by former Finance Secretary and
RBI
Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry an
d
recommend its future direction. In 1994, the committee submitted the report and
gave the
following recommendations:
S St tr ru uc ct tu ur re e
Government stake in the insurance Companies to be brought down to 50%
Government should take over the holdings of GIC and its subsidiaries so that the
se
subsidiaries can act as independent corporations
All the insurance companies should be given greater freedom to operate
13
C Co om mp pe et ti it ti io on n
Private Companies with a minimum paid up capital of Rs.1bn should be allowed to
enter
the industry
No Company should deal in both Life and General Insurance through a single entit
y
Foreign companies may be allowed to enter the industry in collaboratio
n with the
domestic companies.
Postal Life Insurance should be allowed to operate in the rural market.
Only one State Level Life Insurance Company should be allowed to operate in each
stat
R Re eg gu ul la at to or ry y B Bo od dy y
The Insurance Act should be changed.
14
15
16
There are many Life Insurance Companies like
LIFE INSURANCE CORPORATION OF INDIA
BAJAJ ALLIANZ LIFE INSURANCE COMPANY
ICICI PRUDENTIAL LIFE INSURANCE COMPANY
HDFC STANDARD LIFE INSURANCE COMPANY
BIRLA SUN-LIFE INSURANCE COMPANY
17
CHAPTER 2
RESEARCH DESIGN
18
RESEARCH DESIGN
2.1 STATEMENT OF THE PROBLEM
This Study will help us to understand the consumers perception about l
ife
insurance companies. This study will help the companies to understand,
how a
consumer selects, organizes and interprets the Quality of service and
product
offered by life insurance companies.
2.2 SCOPE OF THE STUDY
This study is limited to the consumers within the limit of
The study will be able to reveal the preferences,
f the
customers regarding the life insurance products, It
rance
companies to know whether the existing products are
the
customers needs .
Bangalore city.
needs, perception o
also help the insu
really satisfying
potential buyers.
20
2.6 RESEARCH DESIGN:
A research design is a basic plan, which guides the researcher in the collectio
n and
analysis of data required for practicing the research. Infect the research desig
n is the
conceptual structure where the research is conducted. It constitutes the Blue Pri
nt for
the collection, measurement and analysis of the data. The study is carried out t
o
understand the Consumer Perception about life insurance companies in Bangalore
city .For this study the researcher used exploratory research design. This resea
rch covers
50 consumers in Bangalore city, belonging to various age groups.
2.7 SAMPLE DESIGN:
The process of drawing a sample from a large population is called sampling. Popu
lation
refers to the total of items about which information is defined. Well
-selected samples
may reflect fairly and accurately the characteristics of the population.
Sampling Unit:
The sample unit of this survey was the customers having life insurance policies
in
Bangalore city.
Sample Size:
The sample size was 50 customers of different life insurance companies, from the
various parts of the Bangalore city.
Sampling Technique Adopted:
Convenient sampling
2.8 SOURCES OF DATA:
After identifying and defining the research problem and determining specific inf
ormation
required to solve the problem the researcher will look for the type
and sources of data
which may yield the desired results, while deciding about the method of data col
lection to
be used for the study, there are two types of data.
21
Secondary Data:
Secondary data means data that are already available i.e. they refer to the data
which have
been collected and analyzed by someone and can save both money and t
ime of the
researcher. Secondary data may be available in the form of company re
cords, trade
publications, libraries etc. Secondary data sources are as follows:
Company Reports
Daily Newspaper
Standard Textbook
Various Websites
Primary Data:
Primary data are those, which are collected for the first time. Primary data is
collected by
framing questionnaires. The questionnaire contained questions, which are
both openended and closed-ended. Open-ended questions are questions
requiring
answers in the
responders own words. Closed-ended questions are those wherein the respondent has
to
merely check the appropriate answer from a list of options available.
Any doubts raised
by the respondents were clarified to get the perfect answers from the distributo
rs. Openended questions yielded more insightful information, whereas closed-Ended
questions
22
OPERATIONAL DEFINITIONS OF THE STUDY
Marketing:
Marketing is a social and managerial process by which individuals and group obta
in what
they need and want through creating, offering and exchanging products
of value with
others
.
Marketing Management:
Marketing Management is the process of planning and executing the conception, pr
icing,
promotion and distribution of individual and organizational goals.
Marketing Research:
Marketing research is the systematic and objective search for, and analysis of i
nformation
relevant to the identification and solution of any problems in the field of mark
eting.
Consumer Research:
Consumer research is the methodology used to study consumer behaviour.
Consumer Behaviour:
Consumer behaviour is the study of how individuals make decisions to
spend their
available resources [time, money, efforts] on consumption related items
.
Market Segmentation:
Market segmentation is the process of dividing a market in the distin
ct subsets of
consumer with common needs or characteristics and selecting one or mor
e segments to
target with distinct marketing mix.
Positioning:
Positioning is the act of designing the companys offering and image so that they
occupy
a meaningful and distinct competitive position in the target consumers mind.
23
Perception:
24
2.10 LIMITATIONS OF THE STUDY
Although the study was carried out with extreme enthusiasm and careful planning
there
are several limitations, which handicapped the research viz.
Time Constraints:
The time stipulated for the project to be completed is less and thus there are c
hances that
some information might have been left out, however due care is taken to include
all the
relevant information needed.
Sample size:
Due to time constraints the sample size was relatively small and would definitel
y have
been more representative if I had collected information from more respondents
.
Accuracy:
25
CHAPTER 3
ed on 1
st
September 1956 when the Life Insurance Corporation came into existence.
With largest number of life insurance policies in force in the world, Insurance
happens to
be a mega opportunity in India. Its a business growing at the rate o
f 15-20 per cent
annually and presently is of the order of Rs 450 billion. Together with banking
services,
it adds about 7 per cent to the countrys GDP. Gross premium collection is nearly
2 per
cent of GDP and funds available with LIC for investments are 8 per cent of GDP.
27
Yet, nearly 80 per cent of Indian population is without life insuran
ce cover while
health insurance and non-life insurance continues to be below internati
onal standards.
And this part of the population is also subject to weak social secur
ity and pension
systems with hardly any old age income security. This itself is an i
ndicator that growth
potential for the insurance sector is immense.
A well-developed and evolved insurance sector is needed for
economic
development as it provides long-term funds for infrastructure developmen
t and at the
same time strengthens the risk taking ability. It is estimated that ove
r the next ten years
India would require investments of the order of one trillion US dolla
r. The Insurance
sector, to some extent, can enable investments in infrastructure develo
pment to sustain
economic growth of the country.
INSURANCE AND BUSINESS ENVIRONMENT
Insurance is considered as one of the important segment of the econom
y for its growth
and development. This industry provides long term funds which are esse
ntial for the
growth and development of the nation .so the growth of insurance indu
stry largely
depends up on the environment in which they exists. Here I would like to mention
about
Indian business environment and their impact on insurance sector. There are two
type of
environment which affect the business one is environment which is inte
rnal to the
organization (internal environment) and the other one which is external
to the
organization (external environment). Internal environment includes managem
ent,
technology, competitors, employees, shareholders, policyholders, marketing inter
mediary
etc. The external environment of insurance business has been classified
in four parts,
namely legal, economic, financial, and commercial. let us discus them in detail
by taking
one by one.
28
THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(IRDA)
The Malhotra Committee felt the need to provide greater autonomy to
insurance
companies in order to improve their performance and enable them to act as indepe
ndent
companies with economic motives. For this purpose, it had proposed set
ting up an
independent regulatory body- The Insurance Regulatory and Development Au
thority.
Based on the Malhotra committee report in April 2000 IRDA was incorpo
rated. Since
being set up as an independent statutory body the IRDA has put in a
framework of
globally compatible regulations. Section 14 of the IRDA Act 1999, lays the dutie
s, power
and functions of the authority .the authority shall have the duty to regulate, p
romote and
ensure orderly growth of the insurance business and reinsurance business.
Reforms and Implications
The liberalizations of the Indian insurance sector has been the subjec
t of much heated
debate for some years. The sector is finally set to open up to priv
ate competition. The
Insurance Regulatory and Development Authority bill will clear the way for priva
te entry
into insurance, as the government is keen to invite private sector pa
rticipation into
insurance. To address those concerns, the bill requires direct insurers to have
a minimum
paid-up capital of Rest. 1 billion, to invest policyholders funds only
in India; and to
restrict international companies to a minority equity holding of 26 pe
rcent in any new
company. Indian Promoters will also have to dilute their equity holdin
g to 26 percent
over a 10-year period.
Over the past three year, around 30 companies have expressed interest
in entering the
sector and many foreign and Indian companies have arranged alliances.
Whether the
insurer is old or new, private or public, expanding the market will present chal
lenges. A
number of foreign Insurance Companies have set up representative office
s in India and
have also tied up with various asset management companies. Some of th
e Indian
companies, which have tied up with International partners, are.
29
Indian Partners
International Partners
Bombay Dyeing General Accident, UK
Tata American Int. Group, US
Dabur Group Liberty Mutual Fund, US
ICICI Prudential, UK
Sundaram Finance Winterthur Insurance, Switzerland
Hindustan Times Commercial Union, UK
Ranbaxy Cigna, US
HDFC Standard Life, UK
CK Birla Group Zurich Insurance, Switzerland
DCM Shriram Royal Sun Alliance, UK
Godrej J Rothschild , UK
M A Chidambaram Met Life
Cholamandalam Guardian Royal Exchange, UK
SK Modi Group Legal and General, Australia
20th Century Finance Canada Life
Alpic Finance Allianz Holding, Germany
Vysya Bank ING
Kotak Mahindra Chubb, US
The likely impact of opening up of Indias insurance sector is that private
players
may swamp the market. International insurers often derive a significant
part of
their business from multinational operations. Multinational insurers are
indeed
keenly interested as; perhaps there home markets are saturated while e
merging
countries have low insurance penetration and high growth rates
30
Type of life insurance policies
Whole life insurance
Whole life is a form of permanent insurance, with guaranteed rates and guarantee
d cash
values. It is the least flexible form of permanent insurance.
Universal life insurance
Universal life is similar to whole life, except that you can change the death be
nefit (the
money paid to the beneficiary when the insured person dies), the amount of premi
ums
and how often you pay the premiums.
Variable life insurance
Variable life insurance is the riskiest form of permanent insurance, but it can
also give
you the best return for your money. Essentially, the life insurance company will
invest
your insurance premiums for you. If the investments do well, the death benefit a
nd cash
value of the policy go up. If they do poorly, they go down. It s a little like p
utting your
savings into the stock market.
31
There are a number of policies for specific insurance needs. Some of these inclu
de:
1. Family income life insurance.
This is a decreasing term policy that provides a stated income for a fixed perio
d of
time, if the insured person dies during the term of coverage. These payments
continue until the end of a time period specified when the policy is purchased.
2. Family insurance.
A whole life policy that insures all the members of an immediate family -husband, wife and children. Usually the coverage is sold in units per person, wi
th
the primary wage-earner insured for the greatest amount.
3. Senior life insurance.
Also known as graded death benefit plans, they provide for a graded amount to be
paid to the beneficiary. For example, in each of the first three to five years a
fter
the insured dies, the death benefit slowly increases. After that period, the ent
ire
death benefit is paid to the beneficiary. This might be appropriate if the
beneficiary is not able to handle a large amount of money soon after the death,
but
would be in a better position to handle it a few years later.
4. Juvenile insurance.
This is life insurance on a child. Coverage is paid for by an adult, usually the
parents or guardians. Such policies are not considered traditional life insuranc
e
because the child is not producing an income that needs to be protected. However
,
by buying the policy when the child is young, the parents are able to lock in an
extremely low premium rate and allow many more years of tax-deferred cash
value buildup
.
32
33
different
insurers in a single entity.
Life Insurance Corporation Of India - there are many things to consid
er as Life
Insurance Corporation of India offers various insurance products which
are very
complex, but underlying this complexity is a simple fact. The building
blocks for
all Life Insurance Corporation of India are (1) investment return; (2)
mortality
experience; and (3) expense management; for your Life Insurance Corporation Of
India
34
Objectives of LIC
Spread Life Insurance much more widely and in particular to the rural areas
and
to the socially and economically backward classes with a view to reac
hing all
insurable persons in the country and providing them adequate financial
cover
against death at a reasonable cost.
Maximize mobilization of people s savings by making insurance-linked sa
vings
adequately attractive.
Bear in mind, in the investment of funds, the primary obligation to
its
policyholders, whose money it holds in trust, without losing sight of
the interest
of the community as a whole; the funds to be deployed to the best
advantage of
the investors as well as the community as a whole, keeping in view
national
priorities and obligations of attractive return.
Conduct business with utmost economy and with the full realization th
at the
moneys belong to the policyholders.
Act as trustees of the insured public in their individual and collective capaci
ties.
Meet the various life insurance needs of the community that would ar
ise in the
changing social and economic environment.
Involve all people working in the Corporation to the best of their
capability in
furthering the interests of the insured public by providing efficient
service with
courtesy.
Promote amongst all agents and employees of the Corporation a sense o
f participation,
pride and job satisfaction through discharge of their duties with dedi
cation towards
achievement of Corporate Objective
35
VISION
"A trans-nationally competitive financial conglomerate of significance to
societies and
Pride of India
MISSION
"Explore and enhance the quality of life of people through financial security by
providing
products and services of aspired attributes with competitive returns, a
nd by rendering
resources for economic development
Various policies offered by life insurance corporation of India are
1) Whole Life Schemes
Whole life with profit
Limited payment whole life
Single Premium whole life
Convertible whole life plan
2) Endowment Schemes
Endowment plan with profit
Limited payment Endowment
Jeevan Mitra (Double Cover)
Jeevan Mitra (Triple cover)
Bhavishya Jeevan
Jeevan Anand
New Jana Raksha
3)
4)
Plan for needs of Children
Komal Jeevan
Jeevan Sukanya
Jeevan Kishore
Jeevan Balya
Jeevan Chaya
Marriage/educational annuity
Deffered Endowment
Jeevan Vishwas
8) Plans to cover housing loans
Mortagage redemption
9) Joint life plan
Jeevan sathi
37
10) Investment plan
Bima Nivesh Triple cover
11) Capital market linked plan
Bima plus.
Description of the LIC Policies
Whole life plan:
Whole life plan are those policies which life assured has to pay pre
miums till his
death the sum assured will be paid to his dependent generally 70 years is assume
d as
a maximum age for payment of premium.
Under the whole life premium are payable throughout the life time of the life as
sured
and this is the cheapest form of policy.
This plan is ideally suited to person who wants maximum provision for his family
at
minimum cost. It also meets the needs for funds required for funeral,
religious rites
and ceremonies to be performed, tax liabilities if any and expenses connected wi
th the
last sickness and hospital charges etc.
Endowment Assured Plan:
Endowment plans are not covering the risk for whole life of the life assured. Th
e term
of risk cover under this plan is as per the need of life assured.
Endowment assurance plan are the most popular. They are eminently
Suited to meet it one policy the twin demands of old age provision and risk cove
r for
family. The sum assured is payable on maturity or at death if earlie
r. Thus an
Endowment Assurance Policy provides for retirement and also serves as
a means of
family provisions.
Term Assurance
Under the term assurance the risk cover is generally for specific short term. Su
ch term
assurance is maximum for 2 years. Generally this type of assurance is
useful for air
traveling.
38
Money Back Plans
Under this plan specific percentage of sum assured will be backed to the life as
sured
after specific period of time. This plan is of special interest to p
erson who besides
desiring to provide for their own old age and family feels the need
for lump sum
benefits at periodical intervals. Under these policies part of the sum assured i
s paid to
the life assured in installments at selected intervals.
Children Plan
Under the children plans the risk on the life of the children where covered gene
rally
this type of plans are helpful in education and marriage of the children.
Jeevan Balya:
This plan is designed to enable a parent to provide for the child by payment of
a very
low premium an Endowment Assurance Policy, the risk under which will commence
from the vesting date. In addition, Premium benefit and income benefit are in
cluded
as additional benefit by payment of appropriate additional premium duri
ng the
deferment period.
This policy shall be
cancelled in case the life assured shall die
before the deferred
dates and in such an event provided the policy is then in full forc
e in for a reduced
cash option.
Marriage Endowment/ educational annual plan
Every father desires to see that his children are well settled in li
fe through sound
education, leading to good jobs and happy marriage. These needs arise at ages wh
ich
can be approximately anticipated. Say when the children are between 18 to 25 yea
r of
age. This plan provides for a sum assured to keep aside to meet marriage educati
onal
expenses of children. Under this plan the S A along with the vested
bonus shall be
payable at the end of the selected term either is lump sum or in t
en half yearly
installment, at the option of the life assured nominee beneficiary.
Jeevan Mitra
This plan provides additional insurance cover equal to the sum assured in the ev
en of
death during the term of policy so that the total insurance cover in the event o
f death
is twice the basic sum assured. i.e. The basic sum assured is doubled and the a
ccrued
bonus is also paid.
39
ING VYSYA LIFE INSURANCE
ING Vysya Life Insurance Company Private Limited entered the private life insura
nce
industry in India in September 2001, and in a short span of 18 months has establ
ished
itself as a distinctive life insurance brand with an innovative, attractive and
customer
friendly product portfolio and a professional advisor force. It also distributes
products in
close cooperation with its sister company ING Vysya Bank through Bank assurance.
Currently, it has over 3000 advisors working from 22 locations across the countr
y and
over 300 employees.
ING Vysya Life Insurance Company is headquartered at Bangalore and has establish
ed a
strong presence in the cities of Delhi, Mumbai, Kolkata, Hyderabad and Chennai.
In
addition ING Vysya Life operates in Vizag, Vijaywada, Mangalore, Mysore, Pune,
Nagpur, Chandigarh, Ludhiana and Jaipur.
ING Vysya Life has pioneered product innovations in the Indian life insurance ma
rket
with customer-oriented cash bonus endowment and money back products. (Reassuring
Life and Maximising Life), the first anticipated whole life product (Fulfilling
Life) and
the first Term/Critical Illness combination product (Conquering Life). Conquerin
g Life is
an innovative term and critical illness product that has been launched recently.
Conquering Life provides affordable term cover and critical illness coverage for
10
critical illnesses of upto 50% of the Sum Assured. ING Vysya Life declared a bon
us in
September 2002 of 5% (cash bonus - payable immediately) and 4% (reversionary bon
us payable at the end of the term).
40
The company has over 25,000 customers at the end of 2002 and has achieved a firs
t
premium income of Rs. 17 crores in 2002.
ING Vysya Life Insurance is a joint venture between ING Insurance International
BV a
part of ING Group, the world s largest life insurance company (Fortune Global 50
0,
2002), ING Vysya Bank, with 1.5 million customers and over 400 outlets and GMR
Technologies and Industries Limited, part of GMR Group also based in Bangalore a
nd
involved in the field of power generation, infrastructural development and sever
al other
businesses.
ING Vysya Life has a paid up capital of Rs.140 crores and an authorised capital
of Rs.
200 crores.
Life insurance products offered by the company are:
1) Protection plan
Critical illness plan
Endowment plan
2) Savings plan
Endowment plan
Child protection plan
Money back plan
3) Investment Plan
Whole life plan
Limited payment endowment plan
Anticipated whole life plan
41
TATA-AIG Life Insurance
Tata-AIG Life Insurance Company is a joint venture between the Tata Gr
oup
and American International Group Inc (AIG), the leading US-based international
insurance and financial services organization and the largest underwriter of
commercial and industrial insurance in America. Its member companies write a wid
e
range of commercial, personal and life insurance products through a variety of
distribution channels in approximately 130 countries and jurisdictions throughou
t the
world. AIGs global businesses also include financial services and asset managemen
t,
including aircraft leasing, financial products, trading and market making, consu
mer
finance, institutional, retail and direct investment fund asset management, real
estate
investment management, and retirement savings products. TATA holds 76% shares
and AIG holds 24% shares in the total share capital of TATA AIG.
Tata AIG Life Insurance Company Ltd. "Tata AIG Life" offers a broad array of
life insurance products to individuals, associations and businesses of all sizes
, with a
wide variety of additional coverage to ensure our customers can find an insuranc
e
product to meet their needs. Tata-AIG Life Insurance and Tata-AIG General Insura
nce,
both joint ventures between the Tata Group and American International Group (AIG
),
provide life and general insurance policies and solutions to companies, institut
ions and
organizations across India. It is licensed to operation on 12
th
February 2001. TATA-AIG
life is spread over28 branch offices and 39 training offices across the country.
Tata-AIG Life offers a broad array of life insurance products and
solutions to
corporate and other organizations. These products and solutions have various val
ueadded benefits and options that deliver flexibility and choice to the company s
clients.
Tata AIG Life has completed its 4th year of operations and registered a Total Pr
emium of
Rs. 497 Crores for the period April 2004 - March 2005.
42
The company has some 20 life insurance products with over 250 product combina
tions,
including endowment to term, pension to group life and credit life, money back t
o whole
life plans, etc. Tata-AIG Life uses different distribution channels, in
cluding direct
marketing, brokerage and banc assurance, to service client groups in 19 Indian c
ities.
Tata-AIG Life is the first private insurer in India to offer group
retirement
schemes. Additionally, the company s group management division focuses on provid
ing
employee benefit solutions.
PRODUCTS
The product range of TATA-AIG Life is wide-spread across different seg
ments.
Some of the products are mentioned below.
Maha life
Invest Assure
Health Protector
Star Kid
Shubh Life
Nirvana
Nirvana Plus
Money Saver Plan
Health First
Assure Golden Life
Assure 10, 20, 30 years Security and Growth
Assure Educate at 18, 21
Assure Career Builder Plan at 27
Assure Golden Years Plan
Assure 21 Money Saver Plan
Assure 1/5/10/15/20/25 years/ to age lifelines
TROP
43
HDFC STANDARD LIFE INSURANCE
The Partnership:
HDFC and Standard Life first came together for a possible joint venture, to ent
er the Life
Insurance market, in January 1995. It was clear from the outset that
both companies
shared similar values and beliefs and a strong relationship quickly fo
rmed. In October
1995 the companies signed a 3 year joint venture agreement.
Around this time Standard Life purchased a 5% stake in HDFC, further strengtheni
ng the
relationship.
The next three years were filled with uncertainty, due to changes in
government and
ongoing delays in getting the IRDA (Insurance Regulatory and Developmen
t authority)
Act passed in parliament. Despite this both companies remained firmly committed
to the
venture.
In October 1998, the joint venture agreement was renewed and additional resource
made
available. Around this time Standard Life purchased 2% of Infrastructur
e Development
Finance Company Ltd. (IDFC). Standard Life also started to use the se
rvices of the
HDFC Treasury department to advise them upon their investments in India.
Towards the end of 1999, the opening of the market looked very promi
sing and both
companies agreed the time was right to move the operation to the next level. The
refore,
in January 2000 an expert team from the UK joined a hand picked team f
rom HDFC to
form the core project team, based in Mumbai.
Around this time Standard Life purchased a further 5% stake in HDFC and a 5% sta
ke in
HDFC Bank.
In a further development Standard Life agreed to participate in the Asset Manage
ment
Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was
launched on 20th July 2000
44
Incorporation of HDFC Standard Life Insurance Company Limited:
The company was incorporated on 14th August 2000 under the name of HDFC Standard
Life Insurance Company Limited. Companies ambition from as far back as October 1
995,
was to be the first private company to re-enter the life insurance market in Ind
ia. On the
23rd of October 2000, this ambition was realized when HDFC Standard Life was the
only
life company to be granted a certificate of registration. HDFC are the main shar
eholders
in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standar
d
Life s existing investment in the HDFC Group, this is the maximum investment all
owed
under current regulations. HDFC and Standard Life have a long and close relation
ship
built upon shared values and trust. The ambition of HDFC Standard Life is to mir
ror the
success of the parent companies and be the yardstick by which all other insuranc
e
company s in India are measured.
Products offered by the company are:
INDIVIDUAL PLAN
With Profit Endowment Assurance
With Profits Money Back
Single Premium Whole of Life
Term assurance Plan
Loan Cover Term Assurance
Personal Pension Plan
Childrens Plan
GROUP PLANS
Group Term Insurance
Development Insurance Plan
45
ICICI PRUDENTIAL LIFE INSURANCE COMPANY
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,
a premier financial powerhouse, and prudential plc, a leading internati
onal financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst
the
first private sector insurance companies to begin operations in Decembe
r 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA).
ICICI Prudentials equity base stands at Rs. 925 crore with ICICI Bank
and
Prudential plc holding 74% and 26% stake respectively. In the quarter
ended June 30,
2005 , the company garnered Rs 335 crore of new business premium for
a total sum
assured of Rs 2,619 crore and wrote 111,522 policies. For the past f
our years, ICICI
Prudential has retained its position as the No. 1 private life insurer in the co
untry, with a
wide range of flexible products that meet the needs of the Indian customer at ev
ery step
in life.
Products offered by ICICI Prudential are
1. Savings Plan
1) Smart kid
2) Life Time
3) Save n Protect
4) Cash Bak
2. Protection plan
Life Guard
46
Extra Protection Through
Riders
3. Retirement Plans
Forever Life
Life link pension
Life time pension
Reassure
4. Investment Plans
Assure Invest
Life Link
5. Group plans
Group Superannuation
Group Gratuity
Group Term Assurance
47
OM KOTAK MAHINDRA LIFE INSURANCE COMPANY
Established in 1985 as Kotak Capital Management Finance promote
d by Uday
Kotak the company has come a long way since its entry into corporate
finance. It has
dabbled in leasing, auto finance, hire purchase, investment banking, co
nsumer finance,
broking etc. The company got its name Kotak Mahindra as industrialists Harish Ma
hindra
and Anand Mahindra picked a stake in the company. Kotak Mahindra is
today one of
India s leading Financial Institutions
Old Mutual plc is an international financial services group bas
ed in London with
expanding operations in life assurance, asset management, banking and g
eneral
insurance. Old Mutual is listed on the London Stock Exchange (where i
t is included on
the FTSE 100 Index) and also on the South African, Namibian, Malawi
and Zimbabwe
stock exchanges. It has 156 years of experience in the life insurance
business. The
Products offered by the Company are
Individual Plan
Kotak Endowment Plan
Kotak Term Plan
Kotak Retirement Income Plan
Kotak Child Advantage Plan
Kotak Preferred Term Plan
Kotak Capital Multiplier Plan
Kotak Safe Investment Plan
Riders
Exclusions Under Riders
48
Group Plan
Kotak Term Group plan
Kotak Gratuity Group plan
Kotak Credit Term Group plan
Riders
Exclusions Under Riders
Rural
Kotak Gramina Bima Yojana
49
MET LIFE INSURANCE COMPANY
MetLife
For almost 137 years, Metropolitan Life Insurance Company has been insuring th
e lives
of the people who depend on them. Their success is based on their long history
of social
50
2)
Endowment
Met Gold par
Met Platinum par
Met Junior par
Met junior Non par
3) Money Back
Met Sukh
Met Junior MB
4) Term
Met Mortagage Protector
Met Riders
Accidental death
51
BIRLA SUN LIFE INSURANCE COMANY LIMITED
Birla Sun Life Financial Services offers a range of financial services for resid
ent Indians
and Non Resident Indians. Brought together by two large, powerful and reputed bu
siness
houses, the Aditya Birla Group and Sun Life Financial , it is our aim to offer d
iverse and
top quality financial services to customers. The Mutual Fund and Insur
ance companies
provide wealth management and protection products to customers while the Distrib
ution
and Securities companies provide brokerage and trading services for inv
estment in
equities, debt securities, fixed deposits, etc.
Insurance is not about something going wrong. It s often about things
going right. One of the
wonders of human nature is that we never believe anything can actually go wrong.
Surely, life has
its share of ifs. At Birla Sun Life however, they believe it has its equally ple
asant share of buts as
well. Birla Sun Life stand committed to help you realize those happy moments wh
ich make a life.
Be it living the same lifestyle in your post retirement days or prov
iding a secure future for your
loved ones, in case something happens to you.
The life insurance products offered by the company are
Individual life
Premium Back Term Plan
Flexi Secure Life Retirement Plan
Single Premium Bond
Birla Sun Life Term Plan
Flexi Life Line Whole Life Plan
Flexi Cash Flow Money back Plan
Group Life
Pro Group Term Insurance
Group Superannuation Plan
Group Gratuity Plan
52
MAX NEW YORK LIFE INSURANCE COMPANY LTD.
Max New York Life today emerged as the country s leading private life insurance
company having recorded a sum assured of over Rs 2100 crore for the year ending
March
31, 2002. This was the first full year of operations for Max New York Life.
The company has sold over 64,000 policies in the last financial year. The total
annualized
first year premium for the financial year was over Rs 43 crore with the First Ye
ar
Premium Income amounting to over Rs 38 crore. This has exceeded the expectations
of
the company and the projections as submitted to IRDA. Over 70 per cent of the pr
emia
income was from protection-oriented Whole Life Policies, which reinforces the
company s focus on providing the true value of life insurance to the customer
Given the better-than-expected performance of the company, the shareholders have
increased their investment in the company to Rs 250 crore with an authorized sha
re
capital to Rs 300 crore making Max New York Life Insurance Company among the
highest capitalized life insurance companies in India
Max New York Life also met its commitment for the rural and social sectors.
The company has 11 offices, over 1900 Agent Advisors and over 490 employees. Max
New York Life believes in delivering top value to all its stakeholders. As part
of the best
practices adopted, the Company instituted satisfaction survey s conducted by ind
ependent
agencies to measure the satisfaction levels of its customers, agents and employe
es. Max
New York Life has clearly emerged as delivering top value across all these stake
holders
Max New York Life offers a suite of flexible products. It has eight base product
s and
nine options & riders that can be customized to over 250 combinations enabling
customers to choose the policy that best fits their need
53
The products are
Whole Life Participating d Convertible
Whole Life-Non-Participating,
Children Endowment at age 18,
Children Endowment at age 24,
20-year Endowment Participating Policy,
Endowment to age 60,
Five-year Term Renewable an,
Easy Term
54
BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED
55
CHAPTER 4
res
of dispersion. Alternatively the collected data may be analyzed, the data analys
is is
carried out. The data are first edited, coded and tabulated for analyzing by usi
ng
diagrams, graphs, charts, pictures etc. Data analysis is the process of planning
the
data in an ordered form, combining them with the existing information and
extracting from them.
Interpretation is the process of drawing conclusions from the gathered data in t
he
study. In this research the researcher has analyzed the data using percentages a
nd
graphs.
4.2 DATA ANALYSIS TOOLS USED:
In this research the data analysis tools used are percentages and gra
phs. The
various attributes were analyzed separately and the importance to each
was
calculated on the basis of the percentage. The rank having the maximu
m
percentage was taken to be preferred importance to the particular attribute.
After looking at each attribute separately, all the attributes were co
nsidered
together to develop a map on the most preferred rank for all the attributes.
57
TABLE 1
AGE OF RESPONDENTS
SL.NO
AGE IN YEARS
NUMBER
OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1.
19 28
24
48 %
2.
29 38
13
26 %
3.
39 48
6
12 %
4.
49 58
6
12 %
5.
59 68
0
0 %
6.
69 78
1
2 %
TOTAL
50
100 %
SOURCE :- SURVEY DATA
INFERENCE: The above table classified the respondents according to their age gro
up.
The majority of the respondents belong to the age group 19 to 28 years with 48%
and the
second age group is 29 to 38 years with 26%, followed by 39 to 48 years and 49 t
o 58
years with 12% each.
58
GRAPH 1
AGE OF RESPONDENTS
48%
26%
12% 12%
0%
2%
0%
10%
20%
30%
40%
50%
60%
19 - 28
YRS
29 - 38
YRS
39 - 48
YRS
49 - 58
YRS
59 - 68
YRS
69 - 78
YRS
59
TABLE 2
DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE
TYPES OF
RESPONDENTS
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
MALE RESPONDENTS
34
68%
FEMALE
RESPONDENTS
16
32%
TOTAL
50
100 %
SOURCE: - SURVEY DATA
INFERENCE: This table helps us to understand that there are more number of
male consumers with 68% market share than the female consumers with 32%
Market share.
60
GRAPH 2
DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE
68%
32%
0%
10%
20%
30%
40%
50%
60%
70%
80%
M
A
L
E
R
E
S
P
O
N
D
E
N
T
S
F
E
M
A
L
E
R
E
S
P
O
N
D
E
N
T
S
61
TABLE 3
DIFFERENCIATION OF RESPONDENTS BASED ON THEIR OCCUPATION
SL.NO
OCCUPATION
NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1.
STUDENTS
2
4 %
2.
GOVERNMENT
EMPLOYEES
20
40 %
3.
PRIVATE
EMPLOYEES
24
48 %
4.
HOUSE WIVES
2
4 %
5.
RETIRED
PERSONS
2
4 %
TOTAL
50
100 %
SOURCE :- SURVEY DATA
62
GRAPH 3
DIFFERENCIATION OF RESPONDENTS BASED ON THEIR OCCUPATION
4%
40%
48%
4% 4%
0%
10%
20%
30%
40%
50%
60%
S
T
U
D
E
N
T
S
G
O
V
E
R
N
M
E
N
T
E
M
P
L
O
Y
E
E
S
P
R
I
V
A
T
E
E
M
P
L
O
Y
E
E
S
H
O
U
S
E
W
I
V
E
S
R
E
T
I
R
E
D
P
E
R
S
O
N
S
63
TABLE 4
TABLE SHOWING INCOME GROUP OF RESPONDENTS
SL.NO
INCOME
GROUP
NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1.
LESS THAN
5000
5
10 %
2.
5001 10,000
16
32 %
3.
10001 15000
17
34 %
4.
15001 20000
8
16 %
5.
20001 25000
2
4 %
6.
GREATER
THAN 30000
1
2 %
7.
NIL
1
2 %
TOTAL
50
100 %
SOURCE: - SURVEY DATA
GRAPH 4
GRAPH SHOWING INCOME GROUP OF RESPONDENTS
0%
5%
10%
15%
20%
25%
30%
35%
40%
<5000 5001 1000
10001 15000
15001 20000
20001 25000
>25000 NIL
65
TABLE 5
DIFFERENCIATION OF RESPONDENTS ACCORDING TO THE ASSETS
OWNED
SL.NO
ASSETS
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1.
HOUSE
19
38 %
2.
TWO
WHEELER
25
50 %
3.
CAR
6
12 %
TOTAL
50
100 %
SOURCE: - SURVEY DATA
66
GRAPH 5
DIFFERENCIATION OF RESPONDENTS ACCORDING TO THE ASSETS
OWNED
38%
50%
12%
0%
10%
20%
30%
40%
50%
60%
HOUSE TWO
WHEELER
CAR
67
TABLE 6
MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES
COMPANIES
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
LIC
39
78 %
TATA AIG
1
2 %
HDFC
3
6 %
ICICI
4
8 %
MAX NEWYORK
1
2 %
KOTAK MAHINDRA
1
2 %
ALLIANCE BAJAJ
1
2 %
SOURCE: - SURVEY DATA
INFERENCE: This table helps us to understand the market share of diff
erent
life
insurance companies. LIC has a major share of 78 %, followed by ICICI Prudential
with
8% market share, followed by HDFC Standard Life with 6% market share.
68
GRAPH 6
MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES
78%
2%
6%
8%
2% 2% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
L
I
C
T
A
T
A
A
I
G
H
D
F
C
I
C
I
C
I
M
A
X
N
E
W
Y
O
R
K
K
O
T
A
K
M
A
H
I
N
D
R
A
A
L
L
I
A
N
C
E
B
A
J
A
J
69
TABLE 7
TABLE SHOWING ATTRIBUTES FROM RESPONDENTS
SL.NO
ATTRIBUTE
RESPONDENTS
RANK
1.
RETURN ON
INVESTMENT
17
1
2.
COMPANY
REPUTATION
13
2
3.
PREMIUM
OUTFLOW
10
3
4.
SERVICE
QUALITY
7
4
5.
PRODUCT
QUALITY
3
5
70
GRAPH 7
I
U
M
O
U
T
F
L
O
W
S
E
R
V
I
C
E
Q
U
A
L
I
T
Y
P
R
O
D
U
C
T
Q
U
A
L
I
T
Y
71
TABLE 8
FACTORS WHICH INFLUENCED TO SELECT LIFE INSURANCE COMPANY
SL.NO
FACTORS
RESPONDENTS
RANK
1.
PERSONAL INTEREST
25
1
2.
FAMILY
11
2
3.
FRIENDS
6
3
4.
AGENTS
5
4
5.
ADVERTISEMENT
2
5
6.
OTHERS
1
6
SOURCE :- SURVEY DATA
72
GRAPH 8
FACTORS WHICH INFLUENCED TO SELECT A LIFE INSURANCE
COMPANY
25
11
6
5
2
1
0
5
10
15
20
25
30
P
E
R
S
O
N
A
L
I
N
T
E
R
E
S
T
F
A
M
I
L
Y
F
R
I
E
N
D
S
A
G
E
N
T
S
A
D
V
E
R
T
I
S
E
M
E
N
T
O
T
H
E
R
S
73
TABLE 9
VALUE OF RESPONDENTS LIFE INSURANCE POLICY
SL.NO
AMOUNT
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1.
< 10000
0
0 %
2.
10000 25000
5
10 %
3.
25000 50000
8
16 %
4.
50000-100000
15
30 %
5.
> 100000
22
44 %
SOURCE :- SURVEY DATA
INFERENCE: It can be inferred that majority of consumers buy the life insurance
policy
which costs more than Rs. 1,00,000 followed by Rs. 50,000 to Rs.1,00,000, follow
ed by
Rs. 25,000 to Rs. 50,000.
74
GRAPH 9
VALUE OF RESPONDENTS LIFE INSURANCE POLICY
0%
10%
16%
30%
44%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
> 10000 10000 25000
25000 50000
50000 100000
> 100000
75
TABLE 10
RESPONDENTS PREFERENCE TO INVEST THEIR MONEY
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
INSURANCE
COMPANY
24
48 %
BANK
26
52 %
TOTAL
50
100 %
SOURCE :- SURVEY DATA
INFERENCE: From the table it is clear that majority of people (52%) prefer to in
vest in
Bank and others (48%) prefer to invest in Insurance companies.
76
GRAPH 10
RESPONDENTS PREFERENCE TO INVEST THEIR MONEY
48%
52%
46%
47%
48%
49%
50%
51%
52%
53%
INSURACE
COMPANY
BANK
77
TABLE 11
SATISFACTION OF RESPONDENTS WITH CURRENT LIFE INSURANCE
COMPANY
RESPONSE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES
47
94 %
NO
3
6 %
TOTAL
50
100 %
SOURCE :- SURVEY DATA
INFERENCE: From this table it could be inferred that 94% of the cons
umers are
satisfied with the service and quality of products of their life insurance compa
nies. Only
6% of consumers are not satisfied.
78
GRAPH 11
79
TABLE 12
RATINGS OF THE SERVICES OFFERED BY THE RESPONDENTS LIFE
INSURANCE COMPANY
RATINGS
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
EXCELLENT
7
14 %
VERY GOOD
12
24 %
GOOD
20
40 %
AVERAGE
11
22 %
POOR
0
0 %
TOTAL
50
100 %
SOURCE: - SURVEY DATA
INFERENCE: From this table it could be inferred that 40% of the consumers have r
ated
service offered as good, 24% of them have rated them as very good, 22% of th
em have
rated as average and 14% of them have rated as excellent.
80
GRAPH 12
22%
0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
E
X
C
E
L
L
E
N
T
V
E
R
Y
G
O
O
D
G
O
O
D
A
V
E
R
A
G
E
P
O
O
R
81
TABLE 13
CONSUMERS WILLINGNESS TO COMMUNICATE THE SERVICE OFFERED
BY THEIR LIFE INSURANCE COMPANY
RESPONSES
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES
39
78 %
NO
11
22 %
TOTAL
50
100 %
SOURCE :- SURVEY DATA
INFERENCE: From this table it can be noted that the majority of cons
umers (78%)
would like to communicate to others about the service offered by life
insurance
companies and 22% of consumers would not like to communicate the service offered
.
82
GRAPH 13
CONSUMERS WILLINGNESS TO COMMUNICATE THE SERVICE OFFERED
BY THEIR LIFE INSURANCE COMPANY
78%
22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
YES NO
83
TABLE 14
NUMBER OF LIFE INSURANCE COMPANY KNOWN BY RESPONDENTS
NUMBER OF LIFE
INSURANCE
COMPANY KNOWN
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
< 5
18
36 %
5 7
29
58 %
8 10
2
4 %
>10
1
2 %
TOTAL
50
100 %
SOURCE :- SURVEY DATA
INFERENCE: This table helps us to know the consumer awareness about t
he life
insurance companies. 58% of the consumers are aware about 5 to 7 lif
e insurance
companies, followed by 36% consumers who know less than 5 life insurance compani
es.
84
GRAPH 14
36%
58%
4%
2%
0%
10%
20%
30%
40%
50%
60%
70%
< 5 5 TO 7 8 to 10 > 10
85
TABLE 15
OTHERS
41
8
SOURCE:- SURVEY DATA
INFERENCE: From the table we can rank the life insurance companies, LIC stands f
irst,
followed by ICICI Prudential followed by HDFC Standard life, followed by TATA A
IG.
86
GRAPH 15
SCORES OF DIFFERENT LIFE INSURANCE COMPANIES
1
2
3
4
5
6
7
8
0
1
2
3
4
5
6
7
8
9
L
I
C
I
C
I
C
I
P
R
U
D
E
N
T
I
A
L
H
D
F
C
T
A
T
A
A
I
G
I
N
G
V
Y
S
Y
A
B
I
R
L
A
S
U
N
L
I
F
E
M
E
T
L
I
F
E
O
T
H
E
R
S
87
CHAPTER 5
FINDINGS, CONCLUSION AND
SUGGESTIONS
88
5.1
FINDINGS
90
5.2 CONCLUSION
An Insurance policy is an investment oriented plan. As compared to ot
her investment
plans, the investment portfolio of the Insurance Policy functions like
a mutual fund and
other investment. It is invested in a portfolio of debt and equity i
nstruments, in
conformity with the announced investment policy. Hence it grows or erodes in lin
e with
the performance of that portfolio.
From this study it reveals that the consumers attitude towards Insuranc
e Policy and
Insurance Company changed a lot. A 5 years before the consumers and the general
public
were not interested to take an Insurance Policy but now days there are many opti
ons and
choices in front of the customers. They are interested to take high return polic
ies in order
to secure their lives. People are aware of all the benefits and returns of insur
ance policies.
As a result of this new international and domestic companies are comi
ng to the Indian
Market.
Since there are many players in the Indian Insurance Market the competition leve
l is very
high. So the companies are introducing new schemes. From this it is found that T
he LIC
is the major market share holder in the insurance field. Even if there are many
players in
this field still it is an untapped market. Only a few portion of Indian populati
on is insured.
91
5.3 RECOMMENDATIONS AND SUGGESTIONS
With regard to insurance companies, consumers respond at different rates, depend
ing on
the consumers characteristics. Hence Insurance companies should try to bring th
eir new
product to the attention of potential early adopters.
a) Due to the intense competition in the life insurance market, the life insura
nce
companies have to adopt better strategies to attract more customers.
b) Keeping the cost, quality and return on investment in tact is necessary in o
rder to
tackle the competition.
c) Life insurance products are taken mainly by middle and higher income group.
Hence they should be regarded as maim targeted income groups. Life insurance
products which are suitable for lower income group should also be released so
that the market share increases.
d) Return on investment, company reputation and premium outflow are most
preferred attributes that are expected by the respondents. Hence greater focus
93
BIBLIOGRAPHY
94
BIBLIOGRAPHY
1) Dr. Singh, Avtar, Principles of Insurance Law, S Chand & Sons, Delhi,2003.
2) Leon G. Schiffman, Lestie Lazar Kanwk, Consumer Behaviour, Himalaya
Publishers, Delhi,2004
3) Kotler Philip, Marketing Management, Pearson Education Inc. 11th
Edition.
4) Stanton William J, Etzel Michael J, Walker Bruce J, Fundamentals of
Marketing, McGraw-Hill international, Singapore, 2002
5) Ravi Shankar, Services Marketing, Prentice Hall, 2000.
6) Valarie Azithaml, Marry Jo Bittner, Services of Marketing, Prentice Hall, 20
01
7) Rutchnee .T & K.S.Arun Kumar,Consumer preference & buying perception of
ready made silk garments,PGDSM,International center for training & research in
tropical sericulture,
Newspapers:
Economic Times
Business Line
95
World Wide Web:
www.lic.com
www.irda.org
www.wikipedia.com
96
ANNEXURE
97
QUESTIONNAIRE
A STUDY CONDUCTED TO UNDERSTAND THE CONSUMERS
PERCEPTION ABOUT LIFE INSURANCE POLICIES
1. Name :
2. Age:
3. Address:
3 a. Phone number:
4. Occupation:
5. Monthly income:
<5000
5001-10,000
10,000
-15,000
15,001-20000
20,001-25,000
>25,000
Nil
6. Do You Own
House
Two Wheeler
Car
No
Company Reputation
Product Quality
Friends
Family
Agents
Advertisements
others
10. What is the value of your life insurance?
>10,000
10,000-25,000
25,000-50,000
50,000-1,00,000
>1,00,000
Bank
Yes
No
If Yes Why?___________________________________________
If No Why?___________________________________________
13. How do you rate the service offered by your Life Insurance Company?
Excellent
Average
Very Good
Poor
Good
99
14. Would you like to communicate the service offered by your Life Insurance
Company to others?
Yes
No
15.
<5
5-7
8-10
>10
16. How do you rate the following Life Insurance Companies?
LIC
HDFC
ING VYSYA
MET LIFE INDIA INSURANCE
BIRLA SUNLIFE
ICICI Prudential
TATA AIG
Others
17.
Would You like to continue with the same Life Insurance Company?
Yes
18.
ies
No
Any suggestions for improving the service offered by life insurance compan
Thank You.